Europe TiO2 demand to improve on restocking, Brexit
preparations

Author: Heidi Finch

2019/08/22

LONDON (ICIS)--European titanium dioxide (TiO2)
demand in September is likely to be determined
by restocking and Brexit preparations in a
fragile economic climate.

Typically, demand
improves in September as the downstream paints
and plastics sectors serving the construction
industry pick up speed after the summer
holidays, provided weather conditions are
favourable.

Demand will improve in September month on month
due to refilling of inventories after the
summer holidays, but a weaker economic climate
could offset some of the improvement.

Activity from the main downstream paints sector
has been poorer than expected over recent
months as both economic and weather factors
were not favourable.

The downstream plastics sector has also been
forced to cancel some volumes as weak economic
conditions stifle buying activity.

LOOMING BREXIT
The Brexit deadline at the end of October could
lead to some pre-buying in the UK in order to
build stocks, although that will be dependent
on storage capacity.

As the deadline approaches, players in the UK
and the EU will be preparing in September and
October for a potential no-deal Brexit.

However, while higher demand is likely,
any stock-building is likely to be cautious and
tempered by the soft economic climate and the
approaching low season.

In the first quarter of 2019, intensive
stockpiling took place ahead of the previous
Brexit deadline, planned for 31 March,
especially as it coincided with preparations
for the peak season.

The new Brexit deadline on 31 October comes at
the onset of low season, which could moderate
any stock-building actions.

The market is well covered despite some supply
limitations for chloride-based TiO2.

Due to some supply constraints in certain
downstream sectors, some players agreed higher
prices for the third quarter, compared to the
second, especially for chloride-based plastics
or certain printing ink grades because of
supply constraints.

Exchange rate factors also led to some price
firming in the UK for chloride- and
sulphate-based paints grade TiO2, as sterling
pound lost ground against other major
currencies over the last months.

However, this was not indicative of a general
trend for standard paints grade TiO2 in
mainland Europe.

Pictured: A construction site in Germany; a
post-summer pick-up in activity is likely to
increase TiO2 demandPicture source: Jochen
Tack/imageBROKER/Shutterstock

Focus article by Heidi Finch

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